Question

An accounting clerk for Chesner Co. prepared the following bank reconciliation: Chesner Co. Bank Reconciliation July 31, 20Y4 Cash balance according to company's records $6,050 Adjustments: Outstanding checks $2,900 Error by Chesner Co. in recording Check No. 1056 as $940 instead of $490 450 Note for $9,500 collected by bank, indluding interest 9,880 Deposit in transit on July 31 (6,160) Bank service charges (60) Total adjustments 7,010 Cash balance according to bank statement $13,060 a. From the data in this bank reconciliation, prepare a new bank reconciliation for Chesner Co.. use the format shown in the Let's Review section, For those boxes in Chesner Co. Bank Reconciliation July 31, 20Y4 Cash balance according to bank statement 13.060 Add: Deposit in transit on July 31 6.160 Add: Outstanding checks 2.900 X Adjusted balance 16.320 Cash balance according to company's records 6.050 Add: Error in recording Check No. 1056 as $940 instead of $490 450 Add: Note for $9,500 collected by bank, including interest 9.880 Total additions 10.330 Deduct: Bank service charges 60 X 14 370 Check My Work t more Check My Work uses remainng

Answer 1

a.

Bank Reconciliation

July 31, 20Y4

Cash balance according to bank statement		13,060
Add : Deposit in transit on July 31		6,160
Less : Outstanding checks		-2,900
Adjusted Balance		$16,320
Cash Balance according to Company's records		6,050
Add : Error in recording check no. 1,056 as $940 instead of 490	450
Add : Note for $9,500 collected by bank, including interest	9,880
Total addition		10,330
Less : Bank service charge		-60
Adjusted Balance		$16,320

Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account include a Credit to customer refunds payable.

Correct option is (b)

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